Headlines/Economic Data
General Trend: Equity markets trade generally higher after last week’s gains in the US
Gold miners outperform (gold at 4-month high)
US dollar extends weakness seen on Friday’s session
Various automakers comment at Detroit Auto Show
China PBoC offers new medium-term lending facility (MLF) as M2 growth rate hits record low in Dec
BoJ leaves bond purchases unchanged at daily operation
Japan
Nikkei 225 opened +0.7%; closed +0.3%
General strength in financials: TOPIX Securities Index +1.2%, Sumitomo Mitsui Financial +2%, Mitsubishi UFJ +1.7%
Softbank (9983.JP) +5% in early trade: Looking to list mobile phone unit this year – Nikkei; Topix Information & Communication Index +1%
(JP) Japan Dec M2 Money Stock Y/Y: 3.6% v 4.0%e (Lowest reading since Sept 2016); M3 Y/Y: 3.1% v 3.4%e
(JP) Bank of Japan (BOJ) Gov Kuroda: Economy is expanding moderately, expected to continue expanding moderately; BOJ reiterates will maintain QQE with YCC for as long as needed to reach 2% inflation in stable manner
(JP) Bank of Japan (BOJ) is likely to revise up its FY18 GDP growth forecast by 0.1-0.2% from the current estimate of 1.4% given at Jan policy meeting – Nikkei
(JP) Bank of Japan (BOJ) raises economic assessment in 3 of 9 regions; keeps economic assessment in 6 of 9 regions
Honda (7267.JP): Targeting 2018 global vehicle sales 5.4M – Nikkei
Korea
Kospi opened +0.6%
Mixed trading in chip sector: Samsung Electronics +0.6%, Hynix -2%
Automakers decline: Hyundai Motor -1.2%, Kia -1.2%
(KR) South Korea Dec Export Index m/m: -1.6% v -1.6% prior; y/y: -2.1% v +2.5% prior
(KR) South Korea Office for Govt Policy Coordination: To strongly respond to illegal cryptocurrency trading; to talk about crypto shutdown bill after full discussion
(KR) According to South Korea Financial Supervisory Service (FSS) foreigners bought KRW10T in South Korea stocks in 2017 – Korean press
(KR) South Korea and North Korea to hold working level talks on Jan 17th
China/Hong Kong
Hang Seng opened +0.9%, Shanghai Composite opened flat
Hang Seng Services Index +1.8%; Gaming names supported by broker commentary
Hang Seng Financials Index +1.2% amid PBoC MLF
Hang Seng Energy Index -1.3%, Materials -1.1%
Steel industry head comments that supply will exceed demand sent Maanshan Iron & Steel and Angang Steel lower
(CN) China Banking Regulatory Commission (CBRC) will step up oversight in the banking sector this year to reduce financial risks, stressing that long-term efforts would be needed to control banking sector chaos
(CN) China PBOC Vice Gov Yin Yong: China will remove policy barriers for cross-border payments and enhance financial infrastructural construction in foreign countries as part of efforts to further promote internationalization of the yuan – CF40 Asset Management Forum
(CN) China PBoC OMO: Injects CNY150B v CNY270B injected in 7, 14-day reverse repos prior: Net injects CNY50B v CNY180B drained prior
USD/CNY (CN) PBoC sets yuan reference rate at 6.4574 v 6.4932 prior (strongest since May 2016)
(CN) PBOC LENDS CNY398B V CNY288B PRIOR IN MEDIUM-TERM LENDING FACILITY (MLF); OFFERS 1-YEAR LOANS AT 3.25% V 3.25% PRIOR
(CN) PBoC comments on reasons for MLF operation: There has been a relatively big drop in total liquidity in banking system; Injected funds to counter liquidity drop due to tax payments, maturing loans and RRR payments by financial institutions.
China Dec Banking Data was released on Friday: (CN) CHINA DEC M2 MONEY SUPPLY Y/Y: 8.2% (record low) V 9.2%E; M1 MONEY SUPPLY Y/Y: 11.8% V 12.6%E
(CN) CHINA DEC NEW YUAN LOANS (CNY): 584.4B V 1.00TE
(CN) China Yunnan Local Government Financing Vehicle (LGFV) said to fail to repay certain trust loans – China Securities Times
Looking ahead: China Q4 GDP and Dec data (Fixed Asset Investment, Industrial Production, Retail Sales) due for release on Thursday, Dec 18th
Australia/New Zealand
ASX 200 opened +0.2%; closed %
ASX 200 Resources Index +1%, Financials +0.2%; Telecom -0.4%
(AU) Australia Dec Melbourne Institute Inflation m/m: 0.1% v 0.2% prior; y/y: 2.3% v 2.7% prior
(AU) Western Australia Chamber of Commerce and Industry WA that found consumer confidence reaches highest in four years – AFR
(NZ) New Zealand Treasury publishes Rennie report on decision making: Recommends multiple committees and external members for the RBNZ
Looking ahead: On the 16th Rio Tinto will kick off Australia with Q4 production data
Australia Dec Employment data due on Thursday, Dec 18th
Other Asia
(ID) Indonesia Dec Trade Balance: -$270M v +$579Me (1st deficit since July 2017)
(SG) Monetary Authority of Singapore (MAS) Managing Direc Menon: Inflation surprise could force global central banks to react faster than they today expect
(PH) Philippines sells total PHP20B v PHP20B indicated in 3-month, 6-month and 12-month bills
North America
Ford [F] Exec: Increasing investment into electric vehicles (EV) to $11B from $4.5B – Detroit Auto Show
(US) President Trump said to be softening his attitude toward NAFTA – financial press
Fed Speak: (US) Fed’s Rosengren (moderate, non-voter): additional drop in unemployment rate risks undermining the recovery (from Jan 12th)
(US) Fed’s Kashkari (dove, non-voter) tweets: "I do hope inflation is moving reliably toward our target. 12-mo core CPI of 1.8% = 1.5% PCE & our target is 2% PCE. I, for one, need to see more data." (from Jan 12th)
(US) Fed’s Harker (non-voter, moderate): reiterates two rate hikes probably appropriate for 2018 (from Jan 12th)
(US) Fed’s Kaplan (non voter, moderate): base case still three hikes this year – CNBC (from Jan 12th)
Looking Ahead: US equity markets closed on Monday in observance of holiday: Detroit Auto Show to be held between Jan 13th to Jan 28th
Europe
(DE) Germany Social Democrats in Saxony-Anhalt state reject proposed German coalition with Merkel’s party – German press
(DE) Negotiators working on German govt coalition deal to make changes in immigration and employee insurance contributions – Handelsblatt (from Jan 12th)
EUR/CNY (DE) Germany Bundesbank’s Dombret: to include Yuan in currency reserves – financial press
(EU) ECB Weidmann: Reiterates announcing an end date for QE is justifiable; complete policy normalization will be a long path (comments from Jan 12th)
IMF First Deputy Managing Dir Lipton: Upside and downside global risks are currently balanced; notes cyclical global recovery.
(UK) Boris Johnson said to have warned allies that Brexit is far from certain – UK press
(UK) Jan Rightmove House Prices m/m: +0.7% v -2.3% prior; y/y: 1.1% v 1.0% prior
Carillion: Could enter administration as soon as Monday unless UK govt backs a rescue – Sky News
Saeta Yield: Brookfield reportedly in talks to acquire Saeta Yield – press
Rolls Royce: Reportedly nearing deal to sell its L’Orange unit; wants $700M for the assets – press
Levels as of 01:00ET
Nikkei225 +0.3%, Hang Seng +0.8%; Shanghai Composite -0.4%; ASX200 +0.1%, Kospi +0.3%
Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.2%
EUR 1.2240-1.2188; JPY 111.19-110.58; AUD 0.7961-0.7904;NZD 0.7282-0.7234
Feb Gold +0.7% at $1,344/oz; Feb Crude Oil +0.3% at $64.52/brl; Mar Copper +1.8% at $3.28; AUD 0.7875-0.7905 ;NZD 0.7248-0.7277
Feb Gold +0.5% at $1,328/oz; Feb Crude Oil -0.3% at $63.62/brl; Mar Copper +0.3% at $3.237/lb
